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UK Pensions Ombudsman: no due diligence duty beyond PSA 1993 transfer regime; ‘earner’ not required for ‘transfer credits’, consistent with Hughes obiter (Mrs T and Mr R pension liberation)

Published on: 23 February 2026

Published by a LexisNexis Pensions expert
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Article summary

No legal duty on pension trustees to carry out due diligence beyond compliance with statutory transfer regime, and member did not need to be an ‘earner’ to acquire ‘transfer credits’ as assumed in Hughes (Mrs T, CAS-78486-R9D8 & Mr R, CAS-74246-K7Q0)

Original news Mrs T (CAS-78486-R9D8)—30 September 2025 / Mr R (CAS-74246-K7Q0)—11 September 2025

Summary

The Deputy Pensions Ombudsman has dismissed two complaints concerning a transfer into a pension liberation arrangement. Regulatory guidance imposed no extra obligation beyond following the statutory transfer framework, and compliance with that regime was sufficient. Each complainant was entitled to a cash equivalent. The statutory reference to ‘transfer credits’ concerns the character of the benefits transferred, not the member’s current earnings or earner status. Taken together, these determinations underline how challenging it is to fix trustees with liability for statutory transfers.

What were the facts?

Mr R was a deferred member of the Merlin Pension Scheme (the Merlin Scheme), while Mrs T belonged to the HBOS Final Salary Pension Scheme (the HBOS Scheme). Mr R was influenced by an unregulated adviser to move his Merlin Scheme benefits to a qualifying recognised overseas pension scheme (QROPS), in connection with a pension liberation vehicle...

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